NASDAQ
The index of the U.S. market (Nasdaq) where many technology and growth companies are listed — with a large weight in big tech, it represents how tech stocks are moving.
Nasdaq Composite = all stocks listed on the Nasdaq market, weighted by market cap
If the Nasdaq rises more than the S&P 500, it can be read as a phase in which technology and growth stocks are leading the market; if it lags, as a phase in which money is moving from tech stocks to other areas.
In plain terms
Nasdaq was originally the name of a U.S. stock market, and the index built from the companies listed there is also called the Nasdaq. Many technology and growth companies such as Apple, NVIDIA, and Google are gathered there.
So when you want to see "how tech stocks did today," you look at the Nasdaq. Because much of tech stocks' value rests on expectations for future growth, they tend to swing more sensitively to changes such as interest rates.
What it tells you
The Nasdaq represents the mood of technology and growth stocks. Looking at it together with the S&P 500 lets you tell whether a market rise was led by tech stocks or was broad-based.
Tech stocks are valued on profits far in the future, so they are sensitive to interest rates. That is why, in phases when rates are rising, the Nasdaq often swings more than the S&P 500.
Formula
Nasdaq Composite = all stocks listed on the Nasdaq market, weighted by market cap Nasdaq 100 = the 100 largest among them excluding financials (a large tech weight)
What high or low means
If the Nasdaq rises more than the S&P 500, it can be read as a phase in which technology and growth stocks are leading the market; if it lags, as a phase in which money is moving from tech stocks to other areas.
It is especially sensitive to shifts in interest rates and growth expectations, so looking at the macro environment alongside it helps make sense of the Nasdaq's moves.
The Nasdaq is heavily concentrated in a handful of giant technology companies. Those few names drive the index, so even when the Nasdaq rises, other stocks inside it may be weak.
Because it is tech-centered, volatility tends to be large. Even within the same market, the Nasdaq tends to rise and fall more than the S&P 500.
Index quotes are market data. This term is background knowledge for understanding market news. (※ Our screens cover the SEC-filed financials of individual companies.)
Metrics to read alongside
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This explanation is for information and reference only and is not a recommendation to buy or sell any security. Investment decisions and their consequences are your own.